An agent may be able to bind the principal on contracts with third persons after termination of the agency if the third person is unaware that the agency has ended.

Question

Quizplus · Accepted Answer

This is known as the doctrine of apparent authority, where a third party is led to believe that an agent still has the authority to act on behalf of a principal even after the agency has been terminated. In such cases, the principal may still be bound by the contracts entered into by the agent with the third party.

An Agent May Be Able to Bind the Principal on Contracts